"A private exchange is an existing concept taking on a new name. The idea also has been pitched as a 'defined [contribution]' plan and has been part of a package with a health reimbursement [arrangement]. Simply put, a private exchange is an alternative to a group health benefit plan. Rather than paying a portion or all of a premium, an employer pays each of its workers a flat amount and sends each to choose his or her plan."

"Rick Lindquist, director of sales at Zane Benefits, a private exchange clearinghouse, said the private exchange option is likely to be attractive to employers in a few categories:

- Small businesses that do not offer health benefits.- Any business struggling with annual increases in premiums. - Large companies who want to stop spending so much on health benefits but don't want to lose workers or risk employees being sick and uninsured."

"Employers also must be careful not to violate the Employee Retirement Income Security Act and the Health Insurance Portability and Accountability Act. To stay compliant with the health benefit provisions in ERISA, employers who help offset the cost of an individual plan are responsible for overseeing the plan if they direct employees to enroll in it. The benefit would be subject to a long list of regulations."

Disclaimer: The information provided on this website is general in nature and does not apply to any specific U.S. state except where noted. Health insurance regulations differ in each state. See a licensed agent for detailed information on your state. Zane Benefits, Inc. does not sell health insurance.